DARDEN UVA-S-0156 Rev Jan 30. 2014 BUSINESs PUBLISHING UNIVERSITY VIRGINIA FEDEX
ID: 370120 • Letter: D
Question
DARDEN UVA-S-0156 Rev Jan 30. 2014 BUSINESs PUBLISHING UNIVERSITY VIRGINIA FEDEX IN THE CHINESE EXPRESS DELIVERY MARKET: FACE-OFF IN THE FORBIDDEN CITY On the evening of April 7, 2003, David Cunningham, president of the Asia-Pacific division of FedEx, was standing by the viewing gallery at China International Airport in Beijing, watching the Panda Express lumber down the taxiway on its final approach before takeoff. In the cargo hold of the modified MD-11 aircraft were two very important guests: the giant pandas Le Le and Ya Ya, who were beginning an 18-hour journey from the Beijing Zoo to their new home at the Memphis Zoo in Tennessee.' As the Panda Express barreled down the runway and ascended into the night sky, Cunningham reflected on the ascent of FedEx's business in China and the challenges that lay ahead. The Panda Express took its first flight in December 2000, with the much-publicized delivery of two giant pandas from Wolong Natural Reserve in China's Sichuan Province to the National Zoo in Washington, DC. The delivery was a high point in the FedEx operation in China. At the time, FedEx was the only international express-freight-delivery company with direct flights into such key Chinese cities as Shanghai, Beijing, and Shenzhen (Exhibit 1) FedEx also had a virtual monopoly over South China's international express delivery market Recent competitive events, however, had taken some of the shine off FedEx's operations in China In February 2003, FedEx's main competitor in China, DHL Corporation, acquired a stake in China's largest freight forwarder, Sinotrans, officially known as the China National Foreign Trade Transportation Group, making it the biggest foreign shareholder of the state-owned company. Barely two months later, DHL announced its intention to purchase Airborne Express the third-largest express delivery company in the United States, in a move that would intensify both U.S. and transcontinental competition. Then, FedEx's longtime competitor UPS announced an agreement with Yangtze River Express Airlines to expand its service network in South China. "FedEx Express to Bring Giant Pandas to the U.S," htp/www.fedex.com/pandas/pressI.html (accessed February 27, 2004). Yangtze River Express Airlines was owned and operated by Hainan Airlines. This case was prepared by Jin Leong (MBA '02) under the supervision of Ming-Jer Chen, Leslie E. Grayson Professor of Business Administration. It was written as a basis for discussion rather than to illustrate effective or ineffective handling of an administrative situation. Some numbers in the case have been disguised. Copyright O 2009 by the Darden School Foundation, Charlottesville, VA. All rights reserved. To order copies, send an to sales@ dardenbusinesspublishing.com No part of this publication may be reproduced stored in a retr system, used in a spreadsheet or transmitted in ary form or by any means -electronic, mechanical recording or otherwise-without the permission of the Darden School Foundation photocopying. Page 1 of 21Explanation / Answer
Based in the article we can extract:
Product- Express Mail Delivery Service (Air freight)
Place – China
Price- At par with Global pricing
Promotion- Just- in- Time Delivery by FedEx
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